Dive Brief:
- Oracle’s global cloud estate grew to 101 regions as the company’s infrastructure and software services revenues increased 23% year over year during the quarter to $6.2 billion, CEO Safra Catz said Monday, speaking during a Q3 2025 earnings call.
- “We marked a milestone this quarter as we crossed into triple digits,” Catz said of the cloud expansion. “It’s just a matter of time before we have more cloud regions than all of our competitors combined.”
- Oracle embarked on an aggressive buildout a year ago, pledging to invest $10 billion in infrastructure to support cloud as the technology became the provider’s dominant revenue stream. The company had 68 active cloud regions during Q3 2024, generating $5.1 billion in revenue.
Dive Insight:
Despite the large capital investment in infrastructure, Oracle’s cloud market share is dwarfed by that of the three largest hyperscale providers. The company held just 3% of the massive $330 billion market last year, as AWS, Microsoft and Google Cloud together consumed nearly two-thirds of global cloud revenues, according to Synergy Research Group.
There’s plenty of revenue to go around in a market that sustained year-over-year quarterly revenue growth of 20% or more in 2024. But gaining market share is a heavy lift.
“You are not going to seriously compete with AWS, Microsoft and Google unless you are constantly investing many billions of dollars into expanding and enhancing data center infrastructure,” SRG Chief Analyst John Dinsdale said in an email. “Just ask Oracle: They didn't invest at similar levels, they couldn't meaningfully compete and now they are trying to play catch up.”
AWS alone reported $26.3 billion in capital expenditures for the final three months of last year, more than doubling in one quarter Oracle’s full-year commitment.
Microsoft laid out plans to spend $80 billion on data centers to meet surging demand for AI compute during its current fiscal year, which ends June 30, and Google nearly matched that number, pledging $75 billion this year to expand AI and cloud capacity.
Capacity constraints riddled the hyperscalers, as AI usage drained cloud resources. Oracle felt the pinch but anticipates some easing later this year.
The company is pushing to double its capacity in 2025 as demand for AI compute “continues to dramatically outstrip supply,” Catz said. “We do expect that the component delays that have slowed cloud capacity expansion this year should ease in Q1 2026.”
As part of its expansion strategy, Oracle tethered its cloud database business to its hyperscale competitors through partnerships cemented with AWS, Microsoft and Google Cloud over the last two years. In January, the company added eight regions and cross-region disaster recovery services to the Oracle Database@Google Cloud pact.
Oracle’s multicloud database deployments are now live in 18 regions with an additional 40 in the build phase. Business generated by the alliances grew 200% during the quarter, Oracle Chairman and CTO Larry Ellison said.
While the company has yet to see any revenue from a $500 billion infrastructure building push called Stargate announced in January, Ellison said the first large contract from the project should be coming in “fairly soon.”
